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Ashley Furniture official: No plans for layoffs

Associated Press
8:58 p.m. CDT August 25, 2014

The Wisconsin Economic Development Corp. board approved a $6 million tax credit for Ashley Furniture, conditioned only on the company retaining half of its current employment levels. The money would help relocate part of a creek, which flooded the Ashley property and the nearby village of Arcadia in 2010.(Photo: File/AP)

ARCADIA — Ashley Furniture has no plans for any layoffs and instead plans to add jobs, an official of the Wisconsin-based company told the state's business lobby after a published report saying Ashley Furniture sought $6 million in state tax credits on condition the company be allowed to retain only half of its workforce in Wisconsin.

Company lawyer Bill Koslo said in a statement that the job guarantee number "just sets the base line of the risk Ashley was willing to accept as a good Samaritan to the City of Arcadia."

"It is Ashley's intent to add jobs at all of its locations," Koslo's statement said.

Wisconsin Manufacturers & Commerce, the state's business lobby, shared the statement Monday with the Wisconsin State Journal. The newspaper reported Sunday that the Wisconsin Economic Development Corp. board in January approved the tax credits in a 9-2 vote. The award had not been made public because WEDC and the company have not reached a final agreement.

According to a WEDC staff memo the board reviewed, the company would have to invest $35 million to expand its Arcadia headquarters and retain 1,924 of its 3,848 jobs over the next five years to qualify for the credits. Typically state business grants, loans and tax credits are based on companies retaining 100 percent of their jobs or creating new jobs.

The State Journal contacted the company multiple times last week, and on Friday afternoon it confirmed the conditions of the credits. But that statement made no reference to the company adding jobs. Rather, it warned that "Wisconsin will lose a significant number of jobs" if the tax credits — to be used to reroute a creek, allowing for the company's expansion — are not granted.

In the statement to the state's business lobby, Koslo described the job retention number as "a safe harbor number describing the minimum number of jobs that must, at all costs, be maintained even in the event of a significant catastrophe or a severe unexpected downturn in the economy."

The WEDC memo from earlier this year, however, described the company being concerned about retaining all of its jobs because of rising health insurance costs and the possibility of automation. It said the company would agree to retain 70 percent of current job levels in 2014, 60 percent in 2015 and 50 percent in 2016-18. If employment levels fall below those percentages, the company would have to return the money.

The Ashley Furniture statement to WMC noted the company has added 425 jobs in Wisconsin since 2012, expects to grow its business by 7 percent this year, is working on a second expansion of its Whitehall facility in as many years, has refurbished a new facility in Independence that will open in October and is launching web sales in 2015 that "will create new high tech and customer service jobs."

Scott Manley, WMC vice president of government affairs, emphasized that Ashley plans to donate the $6 million to Arcadia to help move the creek, which flooded the company and the city's downtown in 2010.

Other documents show Ashley Furniture officials gave $20,000 to Gov. Scott Walker's re-election campaign about two weeks after the WEDC board voted. Ronald Wanek, founder and board chairman of Ashley Furniture, and his wife also contributed $10,500 to Walker's campaign in 2010.

Walker, who chairs the WEDC board, said Monday while campaigning in De Pere that Arcadia asked him for the funding, WLUK-TV reported.

"We still haven't finalized that (support), so we don't know if that dollar number will ultimately be what's in the final deal or not. But it's something the city asked for so they could keep a major employer in northwest Wisconsin," Walker said.